REG-Mercator Gold Plc Transaction Update

http://www.businesswire.com/news/home/20100406006366/en

LONDON--(Business Wire)--

MERCATOR GOLD plc
("Mercator Gold", "Mercator" or "the Company")

AIM: MCR
US OTC: MTGDY

London 6 April 2010

Transaction Update

Mercator Gold plc is pleased to advise that pursuant to the terms of the heads
of agreement ("Heads of Agreement") with THEMAC Resources Group Ltd ("THEMAC")
announced on 16 March 2010, US$850,000 was last week advanced ("the Advance") by
the THEMAC to Mercator`s wholly owned subsidiary New Mexico Copper Corporation
("NMCC") to enable NMCC to make a payment of the same amount due on 31 March in
respect of the exercise of its exclusive option to acquire a 100% interest in
the Copper Flat copper-gold-molybdenum-silver project ("Copper Flat") in New
Mexico, USA.

Under the Heads of Agreement, Mercator is to sell its entire interest in NMCC to
THEMAC ("the Transaction"), a company listed on the TSX Venture Exchange
(ticker: MAC.H). Mercator is to receive as consideration 10.5 million fully paid
shares in THEMAC and 10.5 million warrants valid for five years and exercisable
on a one for one basis at C$0.28 per share. Completion of the Transaction is
expected in May or June of this year.

Following the completion of the Transaction it is the intention of THEMAC
(subject to the outcome of all necessary feasibility, financing and permitting
steps) to make all required payments to exercise NMCC`s option over Copper Flat
and to progress the project to production.

THEMAC is to fund or reimburse all expenditure by Mercator and/or NMCC in
relation to the Copper Flat project from the date of the Heads of Agreement
until the completion of the Transaction, including any payments to exercise
NMCC`s option over Copper Flat that fall due.

The subscription by Mercator and its nominees for 5.5 million units of THEMAC at
C$0.15 per unit, each unit to consist of one share and one warrant valid for one
year and exercisable on a one for one basis at C$0.28 ("the Initial Placing"),
is in the process of being completed. Mercator has subscribed for 4 million
units in the Initial Placing and has transferred funds in respect of this
subscription to THEMAC.

Mercator`s Shareholding in THEMAC

As a result of the Transaction, Mercator will not be responsible for the
purchase and development costs of Copper Flat but will retain, through its
shareholding in THEMAC, a very substantial interest in the project.

Mercator will hold up to 29 million shares in THEMAC following completion of the
Transaction, taking into account all shares expected to be acquired by the
Company by means of the Initial Placing and as consideration for the Transaction
and assuming the exercise of all warrants expected to be acquired by the
Company.

It is anticipated that following completion of the Transaction THEMAC will have
a maximum of approximately 70.1 million shares in issue. On this basis,
Mercator`s shareholding in THEMAC would equal up to approximately 41.4% of
THEMAC`s issued share capital.

Completion of the Transaction is conditional on the completion of a second
placing ("the Second Placing") of units of THEMAC sufficient to raise C$5
million at a minimum placing price of C$0.50 per unit, each unit to consist of
one share and one warrant valid for one year and exercisable on a one for one
basis at a price sufficient to raise C$10 million should all the warrants be
exercised.

The closing price of shares in THEMAC on the last trading day prior to their
suspension in connection with the Transaction was C$0.24 and at that point there
were approximately 12.6 million shares in issue (approximately 18.1 million
fully diluted).

Terms of the Advance

The Advance will bear no interest unless the Transaction is not completed, in
which case the Advance must be repaid within six months of the Heads of
Agreement (or the definitive agreement intended to succeed it) being
consequently terminated. Should the Advance not be repaid within that period it
will begin bearing interest at a rate of 8% per annum. Repayment of the Advance
is guaranteed by Mercator in the event that the Transaction is not completed.

Terms of the Initial Placing

The Initial Placing is being carried out on a subscription receipts basis in
order to comply with the requirements of the TSX Venture Exchange. Accordingly,
the units of the Initial Placing will not be issued until the Transaction has
completed. In the event that the Transaction is not completed, a possibility
Mercator considers to be unlikely, Mercator and other subscribers for units of
the Initial Placing would receive an interest in the repayment of the Advance
equal to amount of their subscription. Alternatively, subject to the approval of
the TSX Venture Exchange and the agreement of THEMAC and Mercator, the issue of
the units of the Initial Placing would take place as planned.

About the Copper Flat Project

Copper Flat is a former producing mine with substantial infrastructure still in
place. The Copper Flat deposit has historic reserves of 50.21 million short tons
at an average grade of 0.45% Cu, 0.1244 g/t Au, 2.053 g/t Ag and 0.015% Mo,
based on a cut-off grade of 0.23% Cu.

On the basis of current historic reserves and assuming metal prices of US$3/lb
copper, US$10/lb molybdenum, US$900/oz gold and US$13/oz silver, the Copper Flat
project is estimated to have an NPV of US$348 million and an IRR of 45%,
assuming initial capital costs of US$115 million for the recommencement of
production and a discount rate of 8% (figures sourced from a preliminary review
of the project carried out by an independent consulting group in August 2009).
The current price of copper is in excess of US$3/lb.

For further information please contact

Mercator Gold plc
Michael Silver, Chairman +44 (0) 20 7929 1010
Patrick Harford, Managing Director +1 646 239 9087

Email: info@mercatorgold.com
Website: www.mercatorgold.com

Bankside Consultants Ltd +44 (0) 20 7367 8888
Simon Rothschild
Oliver Winters

Cenkos Securities plc
Beth McKiernan +44 (0) 20 7397 8900

Old Park Lane Capital PLC
Forbes Cutler, Director of Corporate Broking +44 (0) 20 7518 2603

Barry Kaplan Associates +1 732 747 0702
Larry Kaplan

Mercator Gold Plc

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